Research shows that we are now at the tail end of the global economic recession. The UK economy has revealed signs of recovery in the fashion, automotive, hospitality and property industries since early 2010. British confidence in UK property is strengthening, with 84% of respondents to a recent confidence tracker survey stating that they believe right now to be “a good time to buy a property in the UK” (source: UK-based Worldwide Property Group).
Within the high net worth populace, there is much enthusiasm about the end of the recession. The luxury industry began 2011 extremely positively – the marketplace has flourished and shows every sign of continuing to prosper further throughout the rest of the year. World-leading luxury group LVMH posted a sparkling 17 percent rise in first-quarter sales and Swiss luxury goods group Richemont reported pre-tax profits 83 percent up on the previous year. Demand for luxury goods is often seen as a measure of a burgeoning economy and healthy profit indicators such as these go a long way to restoring consumer and industry confidence. It’s undoubtedly reassuring to know that high net worth individuals are just as keen as ever to spend their money.
Luxury companies have adapted to today’s marketplace by tapping into consumer aspirations in innovative ways. They present an enticing world of high-end products, services and collections that the customer feels they must buy into.
The Fashion Industry
Chanel’s Spring/Summer 2011 campaign lends its premium collections and products a more down-to-earth, just-out-of-recession consciousness. In a lush tropical garden smiling couture-clad supermodels Freja Beha Erichsen and Stella Tennant appear to pull away from a hose-wielding Baptiste Giabiconi. The scene suggests playful mid-summer fun and the whole campaign cleverly juxtaposes the opulence of luxury pieces with the natural environment surrounding them. Not only does the campaign showcase elegance and sophistication, but it also tells the story of moment so charming and simplistic that it cannot do anything other than evoke the emotions of the onlooker.
The Automotive Industry
For upmarket car company Lamborghini’s latest launch, the Aventador LP 700-4, luxury was blended with heritage. As the fastest and most powerful mass-produced Lamborghini ever created, the Aventador combines cutting-edge engineering and design values with a respect for the heritage of classic earlier models such as the Miura, Countach, Diablo and Murciélago. Such an amalgamation has enormous appeal for the high net worth individual who respects the merits of both the old and the new.
The hospitality industry
Upmarket hotels in France have taken their offer to the next level by instating an entirely new service standard, the “Palace”. One up on 5-star, this new benchmark creates an impressive new echelon for prestigious clientele to aspire to and provides the industry with an even more exclusive level of luxury.
To navigate their way through changing times and still mirror the needs and wants of the high net worth individual, top-end brands must not only continually reinvent themselves, to ensure that consumers see them as forward thinking, but they must also try to stay aligned with their heritage and tradition.
The perfect combination can be attained when the luxury brand stirs the emotions of the high net worth individual and also presents them with symbols of luxury and high psychological value. To generate a significant return on investment, brands need to concentrate on three main activity channels. Firstly, they must stir the high net worth individual’s emotions through a compelling story or message (such as Chanel’s playful garden scene). Then they must assure them of the exclusivity of their product and, last but by no means least, they must tap into their aspirations by presenting them with a product, line of service they simply must have.
High net worth individuals want to feel that they themselves are exclusive. They want to be treated with the utmost respect and attention. They purchase luxury items to fulfill their dreams and savour the feeling of exclusivity attached to the possession and consumption of rare brands.
For the high net worth individual, luxury is the ultimate status symbol, and the owning of exclusive, luxurious items is the hedonistic recompense of their success. When a luxury brand creates an offering that evokes such a sense of pleasure and acquisition in the consumer without damaging the core essence of the brand, the relationship between the brand and its clientele will have enormous longevity. The Luxury Brands Club boasts a database of 290,000 high net worth individuals across the UK.
Author: Charley Baouamina, Director of The Luxury Brands Club